no real difference here, we just tend to say it that way 'у тебя' like 'in your place, in your posession'. деньги у тебя в кармане, документы у тебя в машине, ключи у тебя в сумке, шапка у тебя в комнате. you can totally say деньги в твоем кармане or шапка в твоей комнате, but it would sound a little bit unnatural.
mayby even better.
Really?! :o What region are you from?
I’m from Belarus, and for me «в твоём кармане» is definitely less natural. For me, it sounds like a not-so-natural translation from English (English tends to use much more possessives, e.g. ‘you brush your teeth’ becomes «ты чистишь зубы» and so on).
What are you talking about?!
The main word in "maybe even better" is maybe, which turns this phrase into my own opinion.
Maybe you provoke a discussion for the discussion? Well... I live in center of civilization: in the capital of Belarus, which makes my position powerful and significant!!!
«Ша́пка лежи́т в твое́й ко́мнате» should work, too. These phrases mean the same thing.
This depends on the context. If the context has some contrast between лежит and висит, for example, then you can’t translate it with ‘is’. If there is no contrast, often you can translate it with ‘is’.
However, Duolingo sentences have no context, so the course authors need to make up some imaginary context all the time. They might have chosen not to accept ‘is’ as translation for «лежит». I’m not sure what their choices are.
I’d say this is a possible reading. Consider reporting it next time you get this sentence.